Monthly Archives: April 2015

Apr 29

Controlling Cash Flow For Small Fashion Businesses -Part 2

By Maria Pesin | Business , Fashion


Cash flow is essential to the survival of a business – arguably more so than profit in the short term. Profit may be essential in the longer-term, but in the short-term cash is needed to pay bills and operating costs. A business with good cash reserves can survive until it becomes profitable. A business that runs out of cash needs to find a solution quickly to avoid going bankrupt.

The very nature of how the fashion industry operates – season by season – and the process by which a collection is developed and finally sold cause cash flow issues for businesses in this sector. Quite often fashion businesses are significantly undercapitalised to cope with the cash flow demands of setting up the business, developing a range, producing and selling. There are many steps along the way to selling a collection which involve laying out funds before receiving money back from sales.

In order to manage your money planning is essential.  You must decided on the costs to build the collection as well as produce it and pay for your overhead.  You will have to have this money in the bank in order to pay these expenses..  Be rigorous in keeping your costs in line with your plan.

As you start to receive income from shipping product keep enough money in the business to keep it running smoothly.  Save for a rainy day. Jim Salmon, VP of Business Services at Navy Federal Credit Union, the world’s largest credit union said, “It’s a sign of strength and maturity for a small business to have a cash reserve. It’s the smart thing to do.”

Work with your lender to set up a line of credit. This can help you through the slow periods. Even when you are first starting out you should ask your bank for a small line of credit in order to start building good credit for your business.  Pay quickly in order to maintain good credit.  I once had a  client who had a major increase in business that he did not have the funds to produce.  Unfortunately his credit rating was so low the best interest rate he could get was at a 29.9%!!  An interesting article to read is “How To Build Business Credit For Your Start Up” by Marco Carbajo, for the SBA,”

Utilize vendors for short term credit.  Negotiate with vendors. Ask your vendors and suppliers for a discount or extended payment terms that better suit your business needs. Build relationships with suppliers

Engage in cash planning. Forecasting and budgeting will help you see the “big picture” and prepare for the ups and downs of a seasonal business. Projecting your income and expenses and keeping a close eye on inflows and outflows is vital.



Apr 27

Controlling Cash Flow For Small Fashion Businesses

By Maria Pesin | Business , Fashion , Productivity

Cash flow is a big concern for fashion businesses.  The industry operates on a seasonal basis and all costs need to be paid before you ship.  It is an especially big concern for new or smaller brands where they have not yet built a business with significant cash reserves.   Most companies don’t  ship every month of the year.  They also do not ship the same amount for each month.  Fall may be their biggest season and they ship most of their product in September.  Summer can be a very small season and they only ship a small capsule group. The ebb and flow of income  gets even more uneven if you sell something like bathing suits or coats.  These classifications sell the majority of product during 3-4 months of the year.  Controlling the flow of cash is extremely difficult.

“Despite the fact that cash is the lifeblood of a business — the fuel that keeps the engine running — most business owners don’t truly have a handle on their cash flow,” says Philip Campbell, a CPA and former chief financial officer in several companies and author of Never Run Out of Cash (Grow & Succeed Publishing 2004). “Poor cash-flow management is causing more business failures today than ever before.” Cash flow is of vital importance to the health of a business.  There is a saying that: “revenue is vanity, cash flow is sanity, but cash is king.”

In the fashion industry cash flow is critical.  Our costs for product come way before we ship and even once we ship receiving payments can take 30 to 90 days.  But this is not the only reason for cash flow problems.  Other reasons are:

  • Low profits or losses
  • Too much inventory
  • Bad Debt
  • Unnecessarily high overhead
  • Non productive use of funds

The question of how to handle cash flow is twofold.  How do you insure that you are not a victim of the above issues and how do you operate with the fluctuations of income?  Over the next several blogs I will discuss ways to manage your cash flow.

Apr 24

Funny and Interesting Facts About Fashion

By Maria Pesin | Fashion , Productivity


These are some funny and interesting facts about fashion that I have heard.

  • Napoleon Bonaparte ordered for buttons to be attached to the jacket sleeves so as to prevent soldiers from wiping off their runny noses on their sleeves.
  • The low-waist baggy pants originated in the prisons of Los Angeles, where inmates were not allowed to wear belts to hold their pants in place.– New York Mayor Fiorello Henry La Guardia invented the thong when he was scandalized to see the cities exotic bar dancers performing without an underwear. He immediately ordered to sew tiny panties or thongs for them.
  • Elizabeth I loved hats so much that she made it compulsory for all females over the age of 7 to wear hats on Sundays and holidays. Anyone who refused to do so was stiffly fined.
  • The Ancient Greeks exercised naked. In fact, this is where our word “gymnasium” comes from; γυμνός (gymnos) means naked in Ancient and Modern Greek.
  • Initially, both men and women wore togas in Rome, but after the 2nd century BC, respectable women wore stolas and prostitutes were required to wear a toga.
  • In 1907 a woman was arrested for wearing a fitted one piece swimsuit on a beach in Boston
  • In 1999 two women died when electricity struck and their underwire bra acted as electricity conductors and transferred the current between them.
  • The bikini was named after the island Bikini Atoll, where the US military was testing its bombs in World War 2. It was so named because its creator, Louis Réard, belived the revealing suit would create a shock like that of the atomic bomb.
  • The skirt is the second oldest piece of clothing, outdated only by the loincloth.
  •  Sneakers came to us thanks to Keds, the first company to create this type of shoe, in 1917. Converse produced their first pair of sneakers later that year.
  • The first pair of Doc Martens were created from old tires.
Apr 23

5 Reasons Why Networking Is Great For Business

By Maria Pesin | Business , Fashion


Networking is a great for business. It should be something you do on a consistent basis.

I manage a Meet-up group called NYC Fashion Entrepreneurs.  Yesterday we had our first meet-up at a local pub in Hell’s Kitchen.  Everyone had a good time and enjoyed meeting each other.  It was a great bunch since everyone did something different in the fashion industry.  Cards were exchanged and ideas of how we could help each others businesses were discussed.  It was just what a good networking event should do.

Here are 5 benefits of networking:

1. Networking exposes you to opportunities you might not normally have. There are always lots of opportunities that come from networking and in fact this is where the benefits of business networking are huge!

2. It’s not WHAT you know, but WHO you know.  This is so true in business. If you want a really successful business, then you need to have a great source of relevant connections in your network that you can call on when you need them.

3. Having like-minded business owners to talk to also gives you the opportunity to get advice from them on all sorts of things related to your business.  We sometimes work in a bubble and having a different point of view can be helpful.

4. Meeting other people who do things differently from you can give you new ideas.  Yesterday I met a women who does amazing illustrations.  It gave me the idea on how I want to do a brochure I am working on.

5.  According to Jim Rohn, “You are the average of the five people you spend the most time with,”  If this is true than you should surround yourself with people who  lift you higher.  Networking is great for this, as business owners that are using networking are usually people that are really going for it, positive and uplifting.

There are so many ways to network.  Join associations or Meet-up groups  There are groups for every type of industry there is.  If there isn’t you can always start one yourself.

Apr 20

Fashion Marketing and Promotion

By Maria Pesin | Business , Fashion

Promotion is what you think of when you hear the words Fashion Marketing.  There are so many ways to get your story out these days with the advent of the internet.  From social marketing to pay per click there are lots of options.

Social marketing is an inexpensive way to market your product.  Blogs, tweets, videos, and Instagram photos are terrific ways to engage your customer.  In order to build you brand you want to create an emotional connection.  What better way to do that then through social media. If you publish amazing, quality content and work to build your online audience of quality followers, they’ll share it with their own audiences on Twitter, Facebook, LinkedIn, their own blogs and more.  This sharing and discussing of your content opens new entry points for search engines like Google to find it in keyword searches. Those entry points could grow to hundreds or thousands of more potential ways for people to find you online.


Promotion also includes PR and Advertising.  While advertising can be expensive you can also advertise using PPC or paid per click. PPC also called cost per click, is an internet advertising model used to direct traffic to websites, in which advertisers pay the publisher (typically a website owner) when the ad is clicked. It is defined simply as “the amount spent to get an advertisement clicked.  You can set your budget keeping it in line with what you can afford.


There’s an old saying: ”Advertising is what you pay for, publicity is what you pray for.Advertising is paid media, public relations is earned media. This means you persuade reporters or editors to write a positive story about you and your brand. It appears in the editorial section of the magazine, newspaper, TV station or website, rather than the “paid media” section where advertising messages appear. So your story has more credibility because it was independently verified by a trusted third party, rather than purchased.


Direct mail encompasses a wide variety of marketing materials, including brochures, catalogs, postcards, newsletters and sales letters. Major corporations know that direct-mail advertising is one of the most effective and profitable ways to reach out to new and existing clients.What’s the advantage? Unlike other forms of advertising, in which you’re never sure just who’s getting your message, direct mail lets you communicate one-on-one with your target audience. That allows you to control who receives your message, when it’s delivered, what’s in the envelope and how many people you reach.  Since a lot of brands do not use direct marketing anymore you can really stand out.


Marketing encompasses many tasks and decisions, of which advertising may only be a small portion.  Try several different types of promotion and test to see which gives you the best results.  Doing several different types at once also creates a synergy which can accelerate your results.

Apr 16

Fashion Marketing and Place (Methods of Distribution)

By Maria Pesin | Uncategorized

According to The Economic Times: “Place in the marketing mix refers to the channel, or the route, through which goods move from the source to the final user. Place could be the intermediaries, distributors, wholesalers and retailers.”  To determine which distribution method is used, the company must understand the needs of the consumer and determine which avenue provides the best ability to put the product or service in front of the potential buyer. Below we take a look at the main channels we commonly see in the marketplace for sales to customer:

Retail Stores – This is a tried and true method.  Selling to stores or having your own store is a great way to get your merchandise out there.  People love to shop and use it as a form of entertainment.  So even though retail stores are not growing as they had in the past it is still a major source for sales.  Having people see, touch, and try on all at once is a big advantage.


On Line/Mobile Devices – We all know these are the fastest growing channels of distribution.  Customers love the ease of shopping from home or frankly any where they are.  It is a very modern way of selling.


Fairs – Many new designers like to sell here.  It is inexpensive to rent a booth and if the fair is well attended you can get great exposure and sell product.


Direct Sales/In Home Parties – This is a form of selling that has been done for many years.  With companies like Avon, MaryKay, and Tupperware it is the only way.  While not many fashion companies do this, I believe if done right you can be very successful.


Catalogs – This is a very expensive way to sell your product.  However since less and less companies are doing it you can really stand out.


Whether retail or business-to-consumer, choosing the right distribution method to complement your product can be a boon to your bottom line.

Apr 15

Fashion Marketing and Price

By Maria Pesin | Business , Fashion

Pricing can influence whether a consumer purchases a product. Although product price matters to a purchaser, it’s important to the seller as well. It takes a combination of favorable market trends, product quality, consumer liking and product differentiation along with correct pricing to generate sales, which lead to the success of a product. When considering the pricing factor, setting prices too high or too low can affect sales.  Sell value not price.  If you are competing on price alone than you are in the commodity business.  And unless you have deep pockets it is a rough way to compete.  Ask yourself, what is the value of the product you have to the buyer?


How your product is priced will dictate what market you are in.  If it is high priced and you have a luxury brand the stores you will sell to differ from a product that has moderate pricing.  It also will direct the focus of how you communicate your message and where.


How a product is priced relative to its competition will significantly affect it’s marketing plan.  If you are not competitive in you’re pricing that can hurt your sales.  When I was President of Jessica Simpson Coats we found ourselves with prices that were 15-20% higher than the brands we hung with.  While we had good product and a great label it negatively impacted the amount of business we did.  Stores constantly told us that they would increase their business with us if we lowered our prices.  However the owner of the company didn’t want to reduce the prices.  (That’s another story.)


Pricing is a function of your business model.  What it costs to make a product and what your markup needs to be to run your business.  But, without considering how it effects you’re marketing you run the risk of not having a successful business.

Apr 14

Fashion Marketing and Product Development

By Maria Pesin | Business , Fashion

How does marketing effect product development?  According to Phillip Kotler, Author and Professor of International Marketing; “Marketers influence demand by making the product appropriate, attractive, affordable, and easily available to target consumers”

The first step of marketing is to get to know and understand the customer so well that the product or service fits him and sells itself.  When I begin working with a new startup the first thing I ask them to do is a competitive analysis.  I want my client to go into the stores and research the brands that they think their line should hang with.  They need to know everything about these companies.  From what the line consists of to who their customer is.  Both the demographics (statistical data relating to the population and particular groups within it) and psychographics (the study and classification of people according to their attitudes, aspirations, and other psychological criteria).  This way they can understand their customer before they design product one.


Understanding the customer is one part, knowing what you bring to the table that is different and unique from what is already in the stores is the other part.  The world doesn’t need a line that has nothing new to offer.  What is needs is real or perceived benefit of a product that differentiates it from the competing brands and gives its buyer a logical reason to prefer it over other brands.  This is often a critical component of a promotional theme around which an advertising campaign is built.

Having  an in depth understanding of end-users’ requirements will give you the best chance of creating and selling an innovative and commercially successful merchandise.  Knowing what your are bringing to the table that is different and unique will allow you to stand out from the competition.  Such a unified strategy will reduce the risk of developing undesirable and superfluous product that wastes your business’ time and money.

Apr 13

Marketing and The Fashion Industry

By Maria Pesin | Business , Fashion

Marketing in the fashion industry is the action or business of promoting and selling products or services.  In the classroom students are taught  the 4P’s of marketing; product, place, price, and promotion.  How these different parts intersect forms the marketing plan for a brand.  Having a marketing plan saves you time and money.
Marketing planning helps you develop products and services in your business that meet the needs of your target market. Good marketing helps your customers understand why your product or service is better than, or different from, the competition.  It also brings brand awareness to your ideal customer.

Product positioning is the process marketers use to determine how to best communicate their products’ attributes to their target customers based on customer needs, competition, available communication channels and carefully crafted key messages. Effective product positioning ensures that marketing messages resonate with target consumers and compel them to take action.  In other words what is the USP (unique selling proposition).

Different sphere

Place stands for the method you use to get your product or service through various distribution channels to the ultimate purchaser or end-user – in other words, how and where the consumer buys your product or service.  It could be traditional brick and mortar, website, trunk shows, and/or many other methods.


Pricing contributes to how customers perceive a product or a service.  Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, it will often affect the demand and sales as well.  Price value is an important component.


Promotion is the method you use to spread the word about your product or service to customers, stakeholders and the broader public.  Ir can consist of advertising, pr, social media, and more.



The next 4 blogs will address each part of the marketing process in more depth.

Apr 10

50 Famous Fashion Quotes

By Maria Pesin | Fashion


50 Famous Fashion Quotes: As Seen on Harpers Bazaar website.

“One is never over-dressed or under-dressed with a Little Black Dress.” —Karl Lagerfeld

“Before you leave the house, look in the mirror and remove one accessory.” —Coco Chanel

I firmly believe that with the right footwear one can rule the world. —Bette Midler

“I loathe narcissism, but I approve of vanity.” —Diana Vreeland

“A woman’s dress should be a like a barbed-wire fence: serving its purpose without obstructing the view.” —Sophia Loren

“I like my money right where I can see it…hanging in my closet.” —Carrie Bradshaw

“Nothing tastes as good as skinny feels.” —Kate Moss

“I can’t concentrate in flats!” —Victoria Beckham

“I don’t do fashion. I am fashion.” —Coco Chanel

“Walk like you have three men walking behind you.” —Oscar de la Renta

“You can have anything you want in life if you dress for it.” —Edith Head

“Fashion is the armor to survive the reality of everyday life.” —Bill Cunningham

“When in doubt, wear red.” —Bill Blass

“I don’t design clothes. I design dreams.” —Ralph Lauren

“Clothes mean nothing until someone lives in them.” —Marc Jacobs

“Fashions fade, style is eternal.” —Yves Saint Laurent

“Anyone can get dressed up and glamorous, but it is how people dress in their days off that are the most intriguing.” —Alexander Wang

“How can you live the high life if you do not wear the high heels?” —Sonia Rykiel

“Don’t be into trends. Don’t make fashion own you, but you decide what you are, what you want to express by the way you dress and the way to live.” —Gianni Versace

“In difficult times, fashion is always outrageous.” —Elsa Schiaparelli

“You can never take too much care over the choice of your shoes. Too many women think that they are unimportant, but the real proof of an elegant woman is what is on her feet.” —Christian Dior

“Fashion is what you’re offered four times a year by designers. And style is what you choose.” —Lauren Hutton

“The dress must follow the body of a woman, not the body following the shape of the dress.” —Hubert de Givenchy

“I know what women want. They want to be beautiful.” —Valentino Garavani

“A woman who doesn’t wear perfume has no future.” —Coco Chanel

“People will stare. Make it worth their while.” —Harry Winston

“Luxury is the ease of a t-shirt in a very expensive dress.” ―Karl Lagerfeld

“And now, I’m just trying to change the world, one sequin at a time.” —Lady Gaga

“My look is attainable. Women can look like Audrey Hepburn by flipping out their hair, buying the large sunglasses, and the little sleeveless dresses.” —Audrey Hepburn

“A little bad taste is like a nice splash of paprika. We all need a splash of bad taste—it’s hearty, it’s healthy, it’s physical. I think we could use more of it. No taste is what I’m against.” —Diana Vreeland

“Elegance is elimination.” —Cristóbal Balenciaga

“Style is a way to say who you are without having to speak.” —Rachel Zoe

“Men tell me that I’ve saved their marriages. It costs them a fortune in shoes, but it’s cheaper than a divorce. So I’m still useful, you see” —Manolo Blahnik

“What you wear is how you present yourself to the world, especially today, when human contacts are so quick. Fashion is instant language.” —Miuccia Prada

“In order to be irreplaceable one must always be different.” —Coco Chanel

“Attitude is everything.” —Diane von Furstenberg

“We must never confuse elegance with snobbery.” —Yves Saint Laurent

“Playing dress-up begins at age five and never truly ends.” —Kate Spade

“Elegance is not standing out, but being remembered.” —Giorgio Armani

“Your dresses should be tight enough to show you’re a woman and loose enough to show you’re a lady.” —Edith Head

“The hardest thing in fashion is not to be known for a logo, but to be known for a silhouette.” —Giambattista Valli

“I don’t approach fashion. Fashion approaches me!” —Daphne Guinness

“We have this saying, Christy and I. We don’t wake up for less than $10,000 a day.” —Linda Evangelista

“My look is a cocktail. I’m not as nicely turned out as the french, but I don’t care like the English.” —Jane Birkin

“More is more and less is a bore.” —Iris Apfel

“Clothes are like a good meal, a good movie, great pieces of music.” —Michael Kors

“I wish I had invented blue jeans: the most spectacular, the most practical, the most relaxed and nonchalant. They have expression, modesty, sex appeal, simplicity—all I hope for in my clothes. —Yves Saint Laurent

“Whoever said that money can’t buy happiness, simply didn’t know where to go shopping.” —Bo Derek

“Big girls need big diamonds.” —Elizabeth Taylor

“Sweatpants are a sign of defeat. You lost control of your life so you bought some sweatpants.” —Karl Lagerfeld